3.70% APY is competitive but not the highest rate available

Whether 3.70% APY is good depends on what other banks are offering at the moment you're comparing. As of late 2024, online banks and credit unions regularly offer rates between 4.00% and 5.35% APY on savings accounts. If you're seeing 3.70%, you're earning more than a traditional brick-and-mortar bank (which typically pay under 0.50%), but you're likely leaving money on the table compared to what's currently available elsewhere.

The rate you see today won't be the rate you see in six months. Banks change their APY based on what the Federal Reserve does with interest rates. When the Fed raises rates, banks raise their savings rates to compete for deposits. When the Fed cuts rates, banks cut theirs. A rate that's competitive this month may fall behind next month, or jump ahead if the Fed moves unexpectedly.

The real question isn't whether 3.70% is objectively good—it's whether you can find better elsewhere in the time it takes to move your money. If switching accounts costs you nothing and takes a few days, moving from 3.70% to 4.50% is worth doing. If you're locked into a term or face a penalty, the math changes.

Key Takeaways

  • 3.70% APY is above what traditional banks pay but below the top rates currently offered by online banks and credit unions.
  • The best savings rates change weekly as banks respond to Federal Reserve decisions and competition for deposits.
  • Moving your money to a higher-rate account costs nothing if you use an online bank, but takes a few business days to complete.
  • A high APY only matters if the account has no monthly fees, no minimum balance requirement, and no withdrawal limits that would trap your money.

How to compare 3.70% to what's available right now

Check the current rates at three to five online banks and credit unions. Look at sites like Bankrate, DepositAccounts, or the banks' own websites—they update daily. Write down the APY, any monthly fees, and the minimum balance required to earn that rate. A bank offering 4.80% APY but charging $10 per month is worse than 3.70% with no fees if you're keeping less than $5,000 in the account.

Pay attention to whether the rate is a promotional rate or a standard rate. Some banks offer 5.00% APY for the first three months, then drop to 2.50%. That's a bait-and-switch. The rate you care about is the one that applies after any promotional period ends. Read the fine print or call the bank and ask directly: "What is the APY after the promotional period?"

If you're currently earning 3.70% at a bank you trust and switching feels like a hassle, calculate what you'd earn in a year at 3.70% versus what you'd earn at the next-best rate you found. If the difference is less than $50 on a $10,000 balance, staying put might be reasonable. If it's $300 or more, moving is worth an afternoon of paperwork.

What happens to your rate if the Federal Reserve changes course

The Federal Reserve sets a target range for interest rates, and banks use that as their signal for what to pay on savings. When the Fed raises rates, banks raise savings rates within weeks. When the Fed cuts rates, banks cut theirs, but usually more slowly—they protect their own profit margins first.

If you lock in 3.70% today and the Fed cuts rates next month, you've made a good bet. Your rate stays at 3.70% while other banks drop to 3.00%. If the Fed raises rates and you're still at 3.70%, you're losing ground. Most savings accounts have no rate lock—your bank can change your rate at any time with notice (usually 30 days). A few banks may provide a rate for a set period, but those are rare and usually come with strings attached.

The takeaway: don't assume any rate is permanent. Check your rate every three months. If you fall behind the market by more than 0.50%, it's time to move.

Fees and account features that matter more than the rate itself

A bank charging $5 per month in maintenance fees is costing you $60 a year. On a $5,000 balance earning 3.70%, you'd earn $185 in interest. The fee eats up nearly a third of your earnings. Before you commit to any account, confirm there are no monthly fees, no minimum balance fees, and no fees for transferring money out.

Check whether the bank limits how many times you can withdraw money per month. Some accounts allow unlimited transfers; others cap you at six per month and charge $10 for each withdrawal beyond that. If you need to access your money regularly, a low withdrawal limit is a dealbreaker no matter how high the rate is.

Confirm the bank is FDIC-insured (for banks) or NCUA-insured (for credit unions). This means your money is protected up to $250,000 if the institution fails. If a bank isn't insured, no APY is worth the risk.

When 3.70% is actually the right choice

If you're comparing 3.70% at a credit union you've been a member of for years to 4.20% at an online bank you've never heard of, staying put might make sense. You know the credit union won't surprise you with hidden fees. You can walk into a branch if something goes wrong. That stability has value, and 0.50% difference on a $10,000 balance is only $50 per year.

If 3.70% is what your current bank is paying and you have no reason to move—no fees, no minimum balance, easy access to your money—moving to chase an extra 0.30% or 0.40% isn't worth the time. But if you're opening a new account or your current bank has dropped below market rate, you should shop around. The difference between 3.70% and 4.50% on $25,000 is $200 per year. That's real money.

3.70% is also reasonable if it comes with features other banks don't offer: a debit card, bill pay, or the ability to link to accounts at other institutions without fees. Some people value convenience over maximum yield. That's a valid choice, as long as you're making it intentionally and not just accepting whatever rate your bank gives you.

How to move your money if you find a better rate

Opening a new savings account at a different bank takes 10 to 15 minutes online. You'll need your Social Security number, a government ID, and proof of address (a recent utility bill or bank statement). The bank will verify your identity and run a soft credit check (which doesn't affect your credit score).

Once the account is open, transfer your money from your old bank to the new one. Most banks offer free transfers via ACH (Automated Clearing House), which takes three to five business days. You can also do an external transfer from your old bank's website—just enter the new bank's routing number and your new account number. Don't withdraw cash and deposit it; that creates a paper trail and can trigger fraud alerts.

After the money arrives and clears (usually by day five), you can close the old account if you want. Some people keep both accounts open—one for the high rate and one for everyday spending. That's fine, as long as you're not paying fees on either account.

Frequently Asked Questions

Will my 3.70% rate stay the same forever?

No. Your bank can change your APY at any time with 30 days' notice. Most savings accounts have variable rates that move up and down based on Federal Reserve decisions and bank competition. If you want a may provide rate, you'd need a certificate of deposit (CD), which locks your money away for a set period (three months to five years) in exchange for a fixed rate.

Is it worth moving my money to get 0.50% more APY?

On a $10,000 balance, 0.50% more earns you $50 per year—about $4 per month. If moving takes an hour and the new bank has no fees, it's worth doing. If the new bank charges monthly fees or has a high minimum balance, the math changes. Calculate your actual gain and decide if your time is worth it.

What if I need the money before the year is over?

A regular savings account has no penalty for withdrawals, so you can take your money out anytime. You'll earn interest only on the days the money sits in the account. If you withdraw after three months, you earn three months of interest at the stated APY, not the full year. CDs are different—they charge a penalty if you withdraw early, so only use them for money you won't need.

Can I trust online banks with high APY rates?

Online banks are regulated the same way as brick-and-mortar banks and are FDIC-insured up to $250,000. They offer higher rates because they have lower overhead—no physical branches to maintain. Before opening an account, confirm the bank is FDIC-insured by checking the FDIC's Bank Find tool on their website.

Should I move my money every time rates change?

No. Moving money every month creates unnecessary work and doesn't significantly increase your earnings. Check your rate every three months. If you fall more than 0.75% behind the market rate, it's time to move. If you're within 0.50%, staying put is reasonable.